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3 Things That Can Destroy Crypto Exchange Named by SEC Chair, FTX as Example

3 Things That Can Destroy Crypto Exchange Named by SEC Chair, FTX as Example



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Yuri Molchan

SEC chairman has likened FTX to Luna, stating that crypto investors need more protection

During his recent appearance on CNBC’s Squawk Box show, SEC boss Gary Gensler was snowed under with questions about the agency’s investigation into the FTX situation.

He also named three stones that can drag a crypto exchange down to the bottom and destroy it.

Three things that destroyed FTX, per Gensler

Gary Gensler reminded the host Andrew Sorkin that he cannot disclose anything about the SEC’s current investigation into FTX. However, he shared a few other interesting things.

He reminded Sorkin about the collapse of Terra Luna and then of several crypto lending platforms, likening FTX to those and saying that they are all interconnected.

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He believes that the sad situation with FTX is as old as finance, and it was down to three things – “a bunch of customer money,” “non-disclosure” and “leverage” as FTX borrowed against its clients’ money.

There are a few concentrated players in the crypto space, Gensler stated, and FTX was one of them. As it and its token began sinking, the crypto space got an electric shock. Bitcoin falling below the $18,000 level was one of its consequences. Besides, a lot of investors lost money not only on the FTT token but also on other cryptos falling in price.

Overall, Gesler stated that investors need a lot more protection in the space than they have now.





Compiled by Metacrunch. Metacrunch is a news complier and aggregator platform which aims to spread awareness and updates on Metaverse, Web 3.0 Technology, Blockchain, Cryptocurrency, NFTs, Airdrops and many more.

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